2013-12-09 09:49:43 - New Financial Services market report from Business Monitor International: "Australia Insurance Report 2014"
As was the case in our 2012 and 2013 Annual Reports, it is the strengths of Australia's insurance sector that stand out. In most countries, wealth management is an ancilliary activity that is undertaken by life insurers or commercial banks. In Australia, the development over nearly 30 years of the superannuation (pension) fund industry means that wealth management is a core business. Moreover, the superannuation funds, with their roughly AUD1,500bn in assets under management (AUM) continue to grow. They are fed in part by contributions from employers on behalf of employees that are determined by the Superannuation Guarantee (SG) Levy rate. Currently 9% of employees' income, this will rise to 12% by mid-2019.
In the short-term, though, the insurers are responding
to a number of changes that have been imposed by the regulator and the Treasury. APRA's Life and General Insurance Capital framework became effective from the beginning of 2013. Broadly analogous to Solvency II in Europe, it has required all insurers to implement some operational changes. However, both the non-life and the life companies are well capitalised and will be able to cope. For the life insurers, the Stronger Super and the Future of Financial Advice (FoFA) reforms will intensify the downwards pressure on fees and prices. However, over the longer term, they will probably improve the perceptions of the insurance/ wealth management industry in Australia of consumers/investors.
Full Report Details at
In the recent past, the leading life insurers have been consolidating already strong market positions by exploiting brands or making acquisitions that reinforce their offerings in particular, usually quite rapidly growing areas. Foreign life groups are competing in Australia, but are tending to focus on niches where brand and (established, multiple) distribution channels are less important.
Almost all the non-life companies, which are generally world-class in terms of scale and sophistication, have been able to achieve (near) double-digit premium growth in H113 relative to H112. Combined operating ratios have generally improved quite dramatically, in part because of the strengthening in prices and rates and in part because of lower claims. Underwriting has been characterised by discipline in a market that is competitive, but which is sufficiently large that a number of players can focus on profitable niches. Meanwhile, QBE, Australia's leading multi-national insurer, continues its overseas expansion by way of acquisition. IAG, for its part, has already developed a substantial commercial footprint elsewhere in the Asia-Pacific.
Report Table of Contents:
BMI Industry View
- Table: Australia's Total Premiums, 2010-2017
- Business Environment
- Industry Forecast- Life
- Table: Total Life Premiums, 2010-2017
- Industry Forecast- Non-Life
- Table: Total Non-Life Premiums, 2010-2017
Industry Risk Reward Ratings
- Australia Risk Reward Ratings
- Table: Australia Insurance Risk/Reward Ratings
- Developed States Insurance Risk/Reward Ratings
- Table: Developed States Insurance Risk/Reward Ratings
- Life Sector Update
- Non Life Sector Update
Industry Trends and Developments
- Life Growth Drivers and Risk Management Projections
- Table: Insurance Key Drivers, Demographics 2010-2017
- Non Life Growth Drivers and Risk Management Projections
- Macroeconomic Forecast
- Table: Australia - Economic Activity
- Political Outlook
- Long-Term Political Outlook - Three Key Challenges: Population, Climate Change, China
- Table: Asia Pacific Regional Security Ratings
- Table: Insurance Key Drivers, Disease Adjusted Life Years 2010-2017
- Table: Insurance Key Drivers, Autos 2010-2017
- Insurance Australia Group
- QBE Insurance Group
- AMP Limited
- Suncorp Group Limited
- Comminsure/ CFSGAM
- Developed States Life Sector Overview
- Table: Developed States Life Premiums, 2010-2017
- Developed States Non Life Sector Overview
- Table: Developed States Non Life Premiums, 2010-2017 (US$mn)
- Demographic Outlook
- Table: Australia's Population By Age Group, 1990-2020 ('000)
- Table: Australia's Population By Age Group, 1990-2020 (% of total)
- Table: Australia's Key Population Ratios, 1990-2020
- Table: Australia's Rural And Urban Population, 1990-2020
- Industry Forecast Methodology
- Risk/Reward Rating Methodology
- Table: Insurance Risk/Reward Ratings Indicators
- Table: Weighting Of Indicators
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